Great Day for Dividends! — Wednesday’s IP Market Recap

by Marc Bastow | June 13, 2012 5:24 pm

[1] (NYSE:JPM[2]) CEO Jamie Dimon might have been the face of the markets today, but it was dividend and economic news that moved them.

Stocks opened lower after reports showed that retail sales remained weak in May[3] and producer prices fell sharply. But the market recovered following a better-than-expected report on U.S. business inventories. Later in the morning, investors were focused on Capitol Hill, where Dimon said he could not defend the trades that led to the bank’s multibillion-dollar loss. Stocks sold off in the final hour of trading on concerns about the debt crisis in Europe.

The Nasdaq was the biggest loser (a recent trend of late[4]), dropping 0.86% to 2,818, the S&P 500 dropped 0.7% to 1,314 and the Dow Jones ended up sliding fractionally to close at 12,478.

The retail sector took a big hit on the economic news, as shares of Sears (NASDAQ:SHLD[5]) and Nordstrom (NYSE:JWN[6]) fell more than 3%, while Saks (NYSE:SKS[7]) and Kohl’s (NYSE:KSS[8]) dipped more than 2%.

Dividend news moved individual stocks during the day, as Dell (NASDAQ:DELL[9]) opened up by announcing its first payout[10], set at 8 cents per share quarterly for a 2.6% dividend yield. The news cheered investors who had seen the stock lose 23%[11] over the last year, and Dell shares were buoyed by 2.5% on the day.

Not as lucky was Caterpillar (NYSE:CAT[12]), which announced a 13% increase in its quarterly dividend but saw its shares drop 2%. CAT would yield about 2.2% as of Wednesday’s close at $85.29. Shares of Target (NYSE:TGT[13]) suffered a similar fate — they fell marginally after the retailer boosted its payout 20% to $1.44 per year. Target’s yield of about 2.1% still trails Wal-Mart’s (NYSE:WMT[14]) roughly 2.4% dividend yield.

Meanwhile, Johnson & Johnson (NYSE:JNJ[15]) traded up 2.2% on an upgrade by Wells Fargo (NYSE:WFC[16]) and news it completed its $19.7 billion purchase of Swiss medical device maker Synthes Inc — a deal that will slightly boost company profit this year. JNJ’s gain was the best among the Dow components.